Is your client installing a heat pump? Why they should notify their insurance provider first

IBC breaks down the difference between heating options

Is your client installing a heat pump? Why they should notify their insurance provider first

Insurance News

By Josh Recamara

Canadians experience significant temperature fluctuations each year, making home heating and cooling a costly decision when they rely on traditional oil, gas or electric systems.

Electric heat pumps and mini-split systems have emerged as potential alternatives, offering more efficient options, with some provinces providing financial incentives for their installation. However, homeowners should notify their insurance providers first, according to the Insurance Bureau of Canada.

A heat pump works by transferring thermal energy from the outside air to the interior of a building. The air is compressed, which increases its temperature, and this heated air is circulated throughout the home.

Heat pumps can also reverse this process in summer, providing cooling. While they may lower energy bills and reduce carbon footprints due to their reliance on electricity, heat pumps may not be as effective in colder climates, as the energy required to extract heat from the outside air increases. Insufficient insulation can further reduce their efficiency.

Additionally, heat pumps may not be the right solution for all homes, and homeowners should evaluate their suitability.

Meanwhile, mini-split systems are similar to heat pumps in that they extract energy from the air to either heat or cool spaces.

Mini-splits differ in that they are ductless and typically serve only individual rooms. They are not designed to heat entire homes and are often installed on walls. Although they use similar technology to heat pumps, their limited scope makes them less versatile as a whole-home heating solution.

When considering either system, homeowners should plan for a backup heat source, the IBC said.

In extreme cold, heat pumps and mini-splits may not provide enough warmth on their own. A furnace or baseboard heaters may be necessary during particularly cold periods. For better energy efficiency, upgrading to a new furnace alongside a heat pump can be a beneficial choice, as modern furnaces tend to be more efficient than older models.

It is also important to take steps to ensure a home retains the heat generated by these systems. Proper insulation, sealing cracks around windows and doors, and installing energy-efficient windows can all help to reduce energy consumption.

Before installing a heat pump or mini-split system, homeowners should notify their insurance provider. Such modifications may affect coverage, and insurance representatives can clarify how policies would respond to damage caused by extreme temperatures.

Ensuring that the home is adequately heated to prevent damage to pipes and property is essential. Insurance professionals can assist with understanding the implications of heating system changes and help maintain adequate protection for the home.

While heat pumps and mini-splits offer efficient alternatives to traditional heating systems, homeowners must consider their home's needs, potential backup systems, and the impact on insurance coverage before making any changes.

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